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Archive for September, 2008:

The Iranian government has managed to weather another set of sanction from the UN. This is despite Ahmadinejad’s speech at the UN General Assembly, which was anti Western and anti- semitic.

This is quite an accomplishment for Ahmadinejad and the right wingers in Iran. They can now say that talking tough has worked, and the world is at a loss as to how to deal with Iran. That the international community no longer has the patience or the strength to deal with them.

Therefore it is difficult to understand why Gholamreza Aghazadeh, the head of Atomic Energy Organization of Iran (AEOI) has canceled his trip to the annual IAEA meeting in Vienna. It is believed that he did it as a protest. I think there could be another reason. He stayed at home to celebrate Iran’s recent diplomatic accomplishment.

For now, there is no international community to speak of, when it comes to dealing with Iran’s nuclear program. It is now up to the EU and US. Still, all is not lost. There are part of Ahmadinejad’s government which they can hurt with sanctions, badly.

Much to the dismay of Ahmadinejad’s government, oil prices seem to be falling. From a record $147 in July, oil is now trading at around $100 per barrel. And despite Hurricanes Gustav and Ike, which usually push the price of oil up, there is talk that prices may go down to $80 or even to the $70 per barrel mark.

“Oil prices are dropping because they are inflated,” says Fadel Gheit, senior energy analyst for Oppenheimer, in an interview with Business Week. “You cannot sustain an artificial price forever. At the end of the day supply-demand fundamentals will take over.” According to an increasing number of analysts, not even the mighty Chinese economy and its insatiable appetite for oil can keep prices at current levels, because a lot of “hype” is involved in estimating future levels of demand.

The Iranians see no hype in the danger which the falling price of oil entails for them. This concern was openly expressed by Iran’s oil minister, who said that as far as his government is concerned, “$100 a barrel was the lowest appropriate price.” Meanwhile, at the recent OPEC meeting, Iran failed to convince other members to cut production, in order to push oil prices up. Therefore, unless there is a serious event, the government of President Ahmadinejad may find itself facing the nightmare scenario of falling oil prices.

With presidential elections 10 months away and sanctions hurting, this is the last thing Ahmadinejad needs. High oil prices have been like a morphine injection which has kept the sick Iranian economy alive. Despite oil and gas income for this year jumping to $81 billion, representing a whopping 31% increase from last year, Iranian people have seen no improvement in their economic welfare. If anything, the situation is getting worse. Inflation has reached the post-revolution record level of 27%. To make matters worse, the government of Ahmadinejad is coming up with new ways to reduce subsidies which Iran’s citizens receive. First it introduced its controversial petrol-rationing scheme in June 2007. This scheme failed miserably in its plans to reduce traffic and pollution.

Now the Ahmadinejad government wants to reduce government subsidies paid to Iranian families for their gas and electricity bill as well. The first part of this plan, which many Iranians find very annoying, involves each family filling out forms from the government, in which they have to declare their income and assets. Many rich people are openly saying that they are cheating, because declaring a high income could translate into a serious fall in the subsidies received. Others are withdrawing money from the banks in order to hide it from the government inspector’s prying eyes, thus leading to a fall in savings levels.

Should this plan go through, it could cause much pain to Iran’s population. The subsidy replacement plan, which involves paying the subsidy money directly into families’ bank accounts — instead of government paying the subsidy amount directly to the electricity company — is not expected to maintain its value in accordance with high inflation levels. This will mean that if inflation levels stay the same until next year, the value of the subsidy received in cash will be 27% less than last year. With falling oil prices, it is very likely that the government will have to go through with this plan. This will lead to serious damage to Ahmadinejad’s popularity. It will also antagonize Iran’s population. The revolution has not brought them edalat (justice). Now high oil prices, their only hope for better economic welfare, are failing them too.

Despite the rising unpopularity at home, what worries Iran’s leadership even more is that, as history has shown them, lowering oil prices could mean having to be flexible with the West. This was first shown in the mid 1980s, when Iran was fighting Iraq. Midway through the war, many countries were calling for a ceasefire, but Khomeini didn’t listen. He was confident that his forces could go on fighting and topple Saddam. In order to finance this ambition, Tehran attacked oil tankers in the Persian Gulf, with the hope of pushing oil prices up. This didn’t work. By 1988, the falling oil price finally forced Ayatollah Khomeini to take the painful decision of accepting a ceasefire with Saddam Hussein, something which he likened to “drinking a chalice of poison.”

The same happened in 1997. The Asian crisis of that year, which led to a crash in oil prices to less than $10 per barrel, was one of the major motivators behind Iran’s rapprochement with the West, headed by the reformist administration of Ayatollah Khatami. Low oil prices were again a factor behind Iran’s Western-friendly policy of temporarily suspending uranium enrichment in 2005. In fact one of the reasons Iran felt confident enough to stop the suspension was that oil prices started increasing sharply in August that year.

What this all could mean is that if oil prices fall to $70 per barrel or below, Ahmadinejad may find it difficult to maintain the same level of belligerence against the West. Things could get much worse for him if Obama is elected. His pledge to invest $150 billion in renewable energy could very well burst more bubbles around oil prices, thus pulling them to more unbearable lows for right-wingers in Iran — so low that the words “suspension of uranium enrichment” may turn from blasphemy into a realistic option.

Since the election of Mahmoud Ahmadinejad as president, the people’s militia, known as the Baseej in Farsi, has been increasing its prominence inside Iranian military circles.

Until recently, the Baseej’s military capability, comprised mostly of light weapons. Unlike the Islamic Revolutionary Guards Corp (IRGC) or the army, the Baseej does not have an air force, nor does it have heavy mechanized weaponry such as Tanks. In fact, during the eight year war against Iraq, almost all Baseejis were used as foot soldiers, carrying weapons no heavier than Rocket Propelled Grenades (RPG). Many of its soldiers were considered to be cannon fodders for the IRGC. In some cases, instead of using mine clearing equipment, brain washed Basijis were told to walk over the mines. They were told that by doing so, they would become martyrs, and thus go to paradise. Also, its officers did not have senior positions inside the military hierarchy.

However since Ahmadinejad became president, he has made Hejazi, a former Baseej commander, second in charge of the all powerful IRGC. This is a serious boost for the militia force. And now, according to the Iranian news agency Shahab News, he has started to put together an air force for the Baseej, thus boosting the Baseej’s position even more.

Why is Ahmadinejad doing this? Because he prides himself of being a former Baseeji. Not that he fought alongside them during the war. His association with the Baseej came after the war, when he used their extensive networks inside Iran to push through his projects in remote places such as Ardebil province in north Western of the country, where he was a governor.

It is no secret that the three million strong Baseej has unprecedented reach inside Iran. Their presence in remote places, helped him win the 2005 presidential elections. And now, with one year to go before the next elections, he is hoping to use their influence to win the elections again.

Also, some of the senior IRGC officers are concerned about his right wing talk, which could justify war against Iran. In the Baseej, he gets no such opposition. The Baseej’s loyalty and support to him will be very useful in counter balancing opposition against the president in important circles of power.

Last but not least, being the most ideological and loyal members of Iran’s military structure, their growth will strengthen Ayatollah Khamenei and Ahmadinejad’s defenses against the much feared “velvet revolution” against the regime.

As President Ahmadinejad makes his address to the UN General Assembly today, many will be asking: has anything changed since 2005, when he made his first visit.

In terms of his own career, president Ahmadinejad is more unpopular with ordinary Iranians. Under his term, life is becoming more difficult for them. If it wasn’t for the support of Ayatollah Khamenei, he would not have had the influence which he yields today.

However, despite his domestic unpopularity, the main targets of his speech will be the audience at home, and not that of the US or Israel.

Abroad, his statements have already made their mark. His constant attacks against against US and Israel have reached saturation point. Further verbal attacks are not going to have a major impact, even though this is the most likely path he will take.

Even if Ahmadinejad does the opposite by sounding conciliatory, it won’t do him much good. The recent unfavorable IAEA report about Iran, including one in which Tehran was accused of testing missile warheads which could carry a nuclear load, have made it difficult to avert further isolation of his country’s nuclear program.

One area where can have an impact today is domestic politics. Presidential elections are around the corner. As he speaks today, his biggest target will be moderate conservatives and reformist groups inside Iran.

His hope will be that one the one hand, by representing Iran and himself on such an important platform as the UN, and on the other by lambasting the West whose moderate policies the reformists and moderate conservatives depend on, he will be able to present himself to the Supreme Leader as the only suitable candidate to win the presidency again.

Whether or not he will succeed is another matter, which will be decided thousands of miles away from the UN, in the byzantine corridors of power in Tehran.

In his meeting with President Bush today, Iraq’s president Jalal Talebani said “I’m glad to tell you Mr President that our relations with our neighbors is improved very well with Turkey, with Syria, with Iran with the Arab countries” . He went on to say “The relation is normal now and we have no problem with any of those countries. In contrary, many many new ambassadors are coming to our country from Arab countries”.

The Iraqi president may be getting ahead of himself. Iran, Syria, Saudi Arabia and Turkey are still interested in having a slice of the Iraqi pie. They haven’t given up their ambition to have influence in the country and are willing to work with their local allies to get it.

The only reason why they are sending ambassadors and working with Talebani is that they are becoming concerned about the departure of the US from Iraq. To avoid the country falling apart and into chaos, which would affect them, for now, they are helping the Iraqi central government. Once the US has left and the situation is suitable, all of the aforementioned countries are likely to restart where they left off, using all means possible, political, and military.

The recent threats made by the Iranian military regarding the option of closing down the strait of Hormuz has made the oil producing Persian Gulf emirates nervous.

As well as working behind the scenes to facilitate a diplomatic solution, many of them have come up with a number of ideas, one of which is to build a pipeline to transfer oil and gas from the Persian Gulf side of the strait of Hormuz, to the Arabian sea side. This project will enable ships to load up oil and other goods, without having to pass through the strait. Although this will be beneficial to them, it will be at the expense of Iran,as it will cause a huge depreciation in the strategic value of the strait of Hormuz, and Iran’s control over it.

The other project which is currently being studied involves the building of a canal through the desert to enable ships to pass through. This would use the same concept as the Suez and Panama Canal. With a price tag of $200 billion, some are debating its cost effectiveness.

This comes on the heels of another blow to Iran’s position from the Persian Gulf countries. This time, from the economic perspective. According to the Financial Times “The head of an Iranian equities fund is abandoning attempts to set up operations in the Gulf, blaming the political tensions surrounding Tehran’s nuclear program. The decision comes after Dubai officials blocked the company from receiving a financial services license and Arab investors shunned investment opportunities”.

As these new developments show, despite the warm hand shakes and gestures of friendship, the Persian Gulf Emirates are viewing Iran’s regional and nuclear strategies as a threat, and thus want to reduce their exposure to them by lowering Iran’s strategic importance.

These are some of the accusations leveled at Iran’s president, Mahmoud Ahmadinejad. There is valid reason behind all of them and they are why many countries do not want Iran to have a nuclear weapon. This is despite the fact that if and when Iran does get the bomb, Ahmadinejad’s finger will be nowhere near the launch button. Iran’s Supreme Leader Khamenei will make sure of that.

Unlike Ahmadinejad, Asif Ali Zardari Pakistan’s new president, will have his finger on his country’s nuclear button. So it will be interesting to know about his background.

“declared unfit to stand trial in a UK court on account of multiple mental problems. According to court documents filed by his psychiatrists, he suffers from dementia, major depressive disorder and post-traumatic stress after spending 11 of the past 20 years in jail in Pakistan. According to their testimony last year, he found it hard even to recall the names of his wife and children. ”

Pakistan’s case is one of many problems for the US, and it could be about to become much worst. Its population dislike the US more than many other countries in the region, while Al Qaeda is becoming more influential in Pakistan, where it has reached into the country’s influential secret service (ISI). Pakistani Al Qaeda is also making notable progress in its fight against the Pakistani government. For example, it is now in control of roads leading to the city of Peshawar, which has 3 million inhabitants. That would be equivalent to the city of Chicago being surrounded by outlaws, with the US armed forces unable to break the siege.

The Iranian nuclear program is a cause for concern for the West, with much validity. However, equally dangerous, if not more, is the situation in Pakistan, which already is a nuclear country. Just as Saddam’s Iraq took the attention of the West away from Iran’s nuclear program, the current absolute focus on Tehran’s nuclear ambitions may do the same to the troubles in Pakistan.

Its official. 12th of June 2009 has been chosen as the date for Iran’s next presidential elections. Although it has not been declared officially, president Ahmadinejad , almost without doubt is going to be running as a candidate.

What concerns many, especially Ahmadinejad’s competitors is that the contest is over before it has even began. Why?

Last week, Iran’s Supreme Leader Ayatollah Khamenei, during a sermon told Ahmadinejad that he should plan for another term: “In other words, imagine that in addition to this year, another four years will be under your management. Work with this in mind; act and plan accordingly”, said Khamenei.

When the Supreme Leader of Iran makes such a statement, many see it as a seal of approval for the president. Since Khamenei was responsible for allowing cheating in Ahmadinejad’s favor in the 2005 elections, with a statement like this, many are convinced that next year’s presidential elections are a foregone conclusion.

However, upon closer inspection of the political history of the Islamic Republic of Iran, one can see that there is still everything to fight for. Khamenei has gone against his promises before. This was shown in 1996 when he openly stated that he backed Nateq Nouri’s ambitions to become president. Instead his arch rival, Khatami won. That could not have happened without Khamenei’s consent.

Although chances of Ahmadinejad being reelected have substantially increased because of this statement, we must not forget that there are 10 months before the presidential reelections. 10 months in Iranian politics is equivalent to 10 years in Swedish politics, in terms of movement.

A lot can happen by then. Khamenei will sit and watch Ahmadinejad’s performance, and the falling oil prices. If Mohammad Bagher Ghalibaf or Ali Larijani, who for now are the most popular alternatives can offer themselves as better choices, either of them will replace Ahmadinejad, no matter what the Supreme Leader told him. Ayatollah Khamenei is only truly loyal to one person: himself.